Profit basics
Contribution margin for ecommerce
Contribution margin shows how much money is left after variable costs. For ecommerce, it is one of the clearest ways to decide which products deserve more attention.
What to include
At minimum, contribution margin should include product cost, payment fees, marketplace fees, shipping subsidies, refunds, and ad spend when you are measuring paid growth.
The exact model can vary by business, but the principle stays the same: include costs that move with selling one more order.
- COGS
- Fulfillment and shipping impact
- Payment and marketplace fees
- Refunds and discounts
- Allocated ad spend
Use it for product decisions
Revenue rankings can overvalue products with weak margins. Contribution margin helps reveal which SKUs create cash and which ones only create activity.
- Find high-revenue low-margin SKUs
- Spot products that can support ads
- Protect bundles from hidden cost pressure
Use it for campaign decisions
A campaign should not only be judged by conversion volume. It should be judged by the contribution profit created after the order economics are included.
- Review contribution by campaign
- Compare new customer offers against margin
- Set spend thresholds by product economics
Put it to work
Turn the guide into a profit operating view.
MarginCore connects ecommerce sales, ad spend, COGS, fees, refunds, and operational adjustments so teams can review profit with less spreadsheet cleanup.